Global Environmental Standards for Industry

Abstract

Global environmental standards are emerging as an increasingly important influence on the environmental performance of industry. In this chapter, we develop a new definition and a categorization of global environmental standards that reflect the different agents involved in their development and the particular network architecture through which environmental standards achieve global reach. We examine new forms of global environmental standards, such as firmbased standards and standards initiated by third-party organizations, such as nongovernmental organizations (NGOs) and industry associations. The growing interest in global environmental standards is shown to arise from processes of economic globalization as well as from increasing external pressure on firms and industries with respect to environmental concerns. The chapter reviews what is known about the prevalence of different types of global environmental standards and the efficacy of these standards in influencing the environmental performance of firms and industries. 295 Annu. Rev. Environ. Resourc. 2007.32:295-316. Downloaded from www.annualreviews.org Access provided by University of California -Davis on 02/05/15. For personal use only.

Geographic Variations in the Early Diffusion of Corporate Voluntary Standards: Comparing ISO 14001 and the Global Compact

“…Also termed voluntary codes, they operate at a number of spatial scales, and cover a multitude of issues (Angel et al, 2007;Nadvi, 2008). CR standards codify a set of rules, roles and expectations in areas of public concern -such as 4 environmental protection, labor rights, anti-corruption and reporting -not adequately addressed by public law.…”

“…Through outward FDI, TNCs can directly "export" standards to host economies, implementing voluntary CR standards in their foreign affiliates and subsidiaries (Bridge, 2002;Garcia-Johnson, 2000). Amongst the reasons why TNCs might choose to deploy an internationally-recognized standard throughout their geographically dispersed network of operations are: to meet local and extra-local stakeholder expectations (Angel et al, 2007;Bansal and Hunter, 2003); to create competitively-valuable "organizational legitimacy" in host economies (Coe and Wrigley, 2007), providing firms with a "social license to operate and expand"; and to save on transaction costs associated with operating different self-regulatory practices in different countries (Angel et al, 2007).…”

“…An important feature of the past two decades has been the growth of voluntary corporate responsibility (CR) standards governing the behavior of firms in areas such as environmental sustainability, labor rights and corruption (Angel et al, 2007;Christopherson and Lillie, 2005;Hughes et al, 2007;Klooster, 2006;Nadvi, 2008).…”

Transnational linkages and the spillover of environment-efficiency into developing countries

“…Further, implementing environment-efficient technologies in developing-country foreign affiliates and subsidiaries may reduce the risk of environment incidents, and damaging claims of "double-standards." Similar points have been made about the propensity of developed-country transnationals to adopt beyondcompliance corporate environmental standards, policies and organizational practices in developing economies (Angel et al, 2007). …”

Does FDI Bring Environmental Knowledge Spillovers to Developing Countries? The Role of the Local Industrial Structure

“…Third, MNEs are likely to use the same standards and practices, including environmental ones, in production across all their markets. These companies pursue this course regardless of whether they are in domestic or foreign markets or required by the host countries or stakeholders to achieve scale economies and managerial simplicity, thereby reducing the risk of environmental and production incidents (Angel et al 2007;Meyer 2004;Perkins and Neumayer 2009). Fourth, the 'crowding-out effect' may also be simply a shortterm dynamic adjustment in response to foreign competition.…”